Sumatra coal railway on course for 2014 opening

25 May 2011

Intended as a heavy haul railway to move coal ‘in abundance’, the line will link PT Bukit Asam’s mines at Banko Tengah with the port of Srengsem in Lampung province, Arifin explained. It is intended to open in 2014 with an initial capacity of 25 million tonnes per annum.

A former Director of Business Development at state railway PT Kerata Api, Arifin explained how government reforms in 2007 had enabled the private sector to create special purpose vehicles to invest in railway infrastructure. Coal railways are at the heart of what Arifin termed ‘a development laboratory’ as Indonesia is the world’s second-largest exporter of coal after Australia. A 130 km coal line is already under construction on the island of Kalimantan, funded by UAE-based Middle East Coal Holdings.

Transpacific Railway Infrastructure, founded by local entrepreneur Prajogo Panjetsu, has an 80% share in BATR, with 10% each held by PTBA and China Railway Engineering Corp. CREC will build the railway under a US$4·8bn contract signed in March last year; this includes a US$3·5bn operations and maintenance agreement running to 2034.